HK Stock Market Move | JD LOGISTICS (02618) rose more than 3%, with annual adjusted net profit reaching 7.71 billion yuan. Morgan Stanley predicts that on-demand delivery services will become the main growth driver.

JD LOGISTICS (02618) rose more than 3%, as of the time of writing, it rose by 2.64% to 13.99 Hong Kong dollars, with a turnover of 83.8712 million Hong Kong dollars. On the news front, recently, JD LOGISTICS released its 2025 annual performance report, with total revenue reaching 217.1 billion yuan, a year-on-year increase of 18.8%, and adjusted net profit of 7.71 billion yuan, showing impressive performance growth. Bank of America Securities stated that JD LOGISTICS exceeded expectations in the fourth quarter of last year, driven by a decrease in operating expenses. Management is optimistic about the outlook for the fiscal year 2026 and guided for revenue growth of 20% to 25% and a pure profit growth of 25% to 30% under non-IFRS guidelines. If this target is achieved, it means that the current profit forecast has an upside potential of 15% to 20%, higher than the most optimistic investors' assumptions by about 10% to 15%, equivalent to a forecasted P/E ratio of less than 7 times for fiscal year 2026. Morgan Stanley believes that although JD LOGISTICS is expected to achieve strong growth in 2026, partly due to the base effect, profit margin trends are believed to be the main driver of its valuation. The bank estimates that JD LOGISTICS revenue will achieve a 22% annual growth in 2026, higher than the 19% in 2025, with on-demand delivery services being the main driver of growth. The bank estimates that on-demand delivery services will contribute 13 percentage points of annual growth, mainly due to the integration of Dada Group's business and the lower base of the food delivery business in the first half of 2025. The bank predicts that JD LOGISTICS' net profit margin will increase from 3.6% in 2025 to 3.7% in 2026, and further expand to 3.8% in 2027.